Corbett outlines opposition to natural gas tax

April 18, 2011

Polls may show a majority of Pennsylvanians favor a natural gas severance tax, but Gov. Tom Corbett calls the concept “un-American,” and argues the levy would stifle a growing industry.

Corbett used a speech before the State Association of Township Supervisors Monday to lay out his case against a tax. It’s the most detailed explanation he’s given to-date on his reasons for opposing a drilling levy. He said drilling is “hiring Pennsylvanians and giving hope” in rural pockets of the state, and that the economic growth is indirectly boosting tax revenue.

“Those are people that are back on the employment rolls. Those are people that, if they were on welfare, they can be off welfare now,” he said. “That we won’t be spending state tax dollars on. Those are people that have salaries that will pay income taxes. That will go and buy goods. That will pay sales taxes. And the people who sell them the goods now have jobs that are growing.”

Addressing the argument that drillers would chalk a tax up as part of the cost of doing business in Pennsylvania’s gas-rich Marcellus Shale, Corbett said drillers would instead migrate to other states.

“I can tell you, I heard throughout the last four months, ‘Well, they’re not going anywhere because the gas is there.’ Quite frankly, that’s what allows them to go anywhere. The gas can’t go anywhere. It’s there. It’s been there for thousands of years. It’s going to be there whenever the price gets better,” he argued. “I want the jobs.”

“I will not let them poison the water,” he responded. “We need to protect the water. We need to protect the environment. But we must do it based on science and not emotion.”

Corbett later added, “Everybody says, well, you took all this money from the Marcellus industry. Had they not given me a dime, I’d be in the same position, saying we need to grow the jobs in Pennsylvania.”

Corbett may be dead-set against a severance tax, but he remains open to some sort of local impact fee, as long as its revenue doesn’t go toward state government.

Why is he opposed to one levy but open to another?

After his speech, Corbett explained, “One is the pledge that I made. Let’s be obvious about that.” During last year’s campaign, Corbett vowed not to raise taxes as governor.

“But No. 2, also: in the discussions that members of the industry have had with me, they understand that they’re having a direct impact on the communities that they’re in,” he said.

Corbett wants to wait for a recommendation from his Marcellus Shale Commission before wading into the details of what an impact fee bill would look like. He may not get that option, though. Senate Republicans continue to work on their own proposal, and will likely introduce it later this spring. Corbett’s commission won’t publish its report until midsummer.

The governor also told reporters he’s opposed to “forced pooling”–legislation that would allow companies to horizontally drill for gas underneath the property of an unwilling land owner, if they had the right to drill on surrounding property.

“If that land owner doesn’t want to give it up, they shouldn’t have to give it up. Because, keep in mind, what I’ve said many, many times: it’s their mineral right. It’s not the state’s, unless the state owns the land,” he explained. “It’s theirs. And forced pooling is not something I will go along with. The industry and I disagree on that.”

The pooling bill introduced last year required drillers to secure rights to 75 percent of surrounding land, before an order would go into effect.